Thursday, October 9, 2008

We, members of the Icelandic nation, are truly sorry for the problems we have caused, and plead guilty with an explanation.

Apart from a brief interlude during the era of the Vikings, we have pretty much kept to ourselves, sitting on a rock in the middle of the ocean.

During the last 3 decades of last century we managed to build up a fairly nice and open economy, where everyone had equal opportunity to succeed, get educated, get taken care of if they got sick, with politicians which were unable to do much damage as everyone pretty much agreed how things should be.

We were given access to the European Economic Area in the early 90's, which was generally regarded as the diet version of the European Union, where we would become members shortly.

This gave us access to the European markets, opened up the free flow of finance, gave our best and brightest the opportunity to go forth and seek their fortune in foreign lands, and for a while things worked fine.

Some of our eccentric quirks turned out to be good PR, and Björk and Sigur Rós suddenly became famous. Our smarter side was put to use in creating successful high technology products, where we enabled people that had lost legs to run in the Olympics, other people to play massively multiplayer online games and we suddenly found that we could create stuff that worked, was useful and people all over the world were willing to buy.

So we didn't pay as much attention to our politicians as we should have, who seemed mired in the politics of the last century, not of the century to come.

That turned out to be a big mistake, one which will cost us dearly.

In their squabbles for domestic power, blatant pandering to their own constituents, and general ineptness (in their defence, they're not well paid), they kept on with business as usual, while a handful of businessmen - and their cronies - started business unusual.

The privatisation of our banks was handled by the politicians in the usual manner, with one bank going to members in good standing of the long-ruling Independence Party, and the other to members in good standing of the equally long-ruling Progressive Party (which nagging tongues claim is neither).

Since we were used to lax regulation, so as not to hinder the political parties to give tidbits to their members, we didn't really put in place a pesky regulatory scheme to keep checks and balances on the entire system, and the schemes we put in place were ignored when needed.

The newly privatised banks were quickly turned into international powerhouses, fueled by cheap loans, mostly foreign. The third bank, which was private to begin with, also took advantage of cheap loans to grow.

Meanwhile, we used the Icelandic Central Bank as a retirement home for politicians we needed to get rid of from the political scene, as throughout the history of the Central Bank it had never really needed to do anything and therefore was considered to be a safe place to store them, maintaining their delusion of grandeur and allowing them to double dip into their pensions while still being on the government payroll.

Before we knew it the owners of the three banks had broken faith with the rest of us, refused to travel with us, pay taxes with us or live amongst us, preferring to live in London and fly up occasionally in their private jets, and while here drive around in Bentleys and Range Rovers, which they apparently impulse bought - all black, unless it was for the wife, then white.

They were careful to spread the wealth, hiring lots of people at 3 to 30 times normal wages, sponsored concerts of international stars and seemed to have unlimited opportunities. Before this, the only major concerts we'd seen were Deep Purple and Led Zeppelin in the early 70s, Smokie in the late 70's, one Clash concert in the early 80s and a tour of the Israeli guys from the Eurovision song contest who sang the Hubba Hulle Hulle Hulle song.

So we were dazzled.

Our prime minister got into occasional fights with the nouveau riche, who - after buying all the media companies (and adding some more) - explained that he was just jealous.

The prime minister got sick, nearly lost an election, and was put out to pasture as the Head Honcho of the Icelandic Central Bank, a process we had used before with little damage.

So when it turned out that the couple of handful of super-rich Londoners had in effect built a Ponzi scheme, we were ill equipped to deal with it.

The chief of the Central Bank was the politician that hadn't wanted to put in place all the pesky rules and regulations when he privatized the banking system. He had run a relaxed and lax oversight system.

Our new prime minister is the former second in command of the politician in the Central Bank, and it is not clear to us - or to him - or to the politician in the central bank whether the changing of the guard has really taken place.

Our finance minister is a veterinarian who lost internal elections in his party to a guy recently convicted of fraud involving public funds.

Our foreign minister, the only person in Icelandic politics strong enough to stand up to the old guard, was diagnoced with benign cancer in the brain and was rushed into surgery in New York and banned from travelling for a few weeks, so she is out of action.

So when the whole scheme imploded due to the international credit crunch, we didn't really know what hit us.

Suddenly all of our banks failed.

Suddenly we found out that we - as a nation - were responsible for sizable sums that the super rich had gotten people in other nations to deposit with them, without having asked us for permission.

We suddenly found that it was generally not a good idea to have on the front line people who had been selected to be there due to their quality of seeming harmless.

People who are so overwhelmed by the position they're in that they cannot even do the obvious and inevitable; say they're sorry and ask for help.

People who are willing to go to Putin's Russia to bail us out - that bastion of civilization, human rights and good will to all men.

So for that, the damage this has caused, the money lost, and the misery caused, we'd like to say:

We're sorry, please help.

P.S. The super rich have left in their private jets. You'll find them in London - with their, our and parts of your wealth.